How to Change Your Home Loan Tenure: Steps, Benefits, and Tips

Your home loan is one of the most significant financial commitments you will ever make. The tenure of your home loan directly impacts your monthly EMIs (Equated Monthly Instalments) and overall financial planning. But what if you need to change your home loan tenure? Whether it is to reduce your EMI burden or pay off the loan faster, this guide will walk you through the steps, benefits, and considerations of changing your home loan tenure.

Understanding home loan tenure

Home loan tenure is the length of time you agree to repay the loan. With Bajaj Housing Finance, you can avail of a home loan with the repayment tenure going up to 32 years. Longer tenures mean smaller EMIs but higher interest payments over time, while shorter tenures result in higher EMIs but lower overall interest.

Why change the tenure?

Changing the tenure of your home loan can help you:

• Reduce financial stress by lowering EMIs.
• Save on interest by opting for a shorter tenure.
• Align your repayment plan with your income changes or future goals.

Steps to change the tenure of your home loan

Here are a few steps you can take to update or change the repayment tenure:

1. Contact your lender: The first step is to get in touch with your lender. Most banks and financial institutions allow home loan tenure changes, but terms and conditions may vary.

2. Evaluate your financial situation: Before making changes, assess your current financial situation. Can you afford higher EMIs for a shorter tenure? Do you need lower EMIs to manage other expenses? Use a home loan EMI calculator to see how tenure changes affect your repayment.

3. Submit a request: Once you decide on the desired tenure, submit your request to the lender. Fill out the required forms. Provide any additional documents if needed (e.g., updated income proof).

4. Receive confirmation: After the lender reviews your request and updates the tenure, you will receive a new repayment schedule. Review it carefully to ensure it aligns with your expectations.

When should you consider changing your tenure?

• Salary or income changes: If you have recently received a salary hike, consider reducing the tenure to pay off the loan faster. Conversely, if your income has decreased or expenses have increased, opting for a longer tenure can reduce the monthly burden.
• Lower interest rates: If your lender lowers the interest rates or you switch to a lender offering better rates, tenure adjustment can help optimize your repayment.
• Life events: Major life events like marriage, starting a family, or retirement planning may require you to rethink your financial commitments, including your home loan tenure.

Benefits of changing your home loan tenure

• Financial flexibility: A shorter tenure helps you become debt-free faster, while a longer tenure eases your EMI payments.
• Better budget management: Tenure changes can free up funds for other expenses or investments, improving your overall financial health.
• Interest savings: Reducing the tenure minimises the total interest paid, potentially saving you lakhs over the loan term.

Strategies to shorten your home loan tenure

Shortening your home loan tenure can help you pay off your loan faster and save on interest. Here are a few strategies:

• Increase your EMI payments: Increasing your monthly EMI payments can significantly reduce the loan tenure. Even a small increase can help pay off the principal faster.
• Make lump sum payments: If you receive a bonus or windfall, consider making a lump sum payment toward your principal to reduce the loan balance and shorten the tenure.
• Refinance your loan: If interest rates drop, refinancing your loan can help reduce your EMI or shorten the loan tenure while keeping the monthly payment manageable.
• Adjust your repayment plan: Opt for a shorter tenure when your financial situation allows it, ensuring you pay less interest overall.

By using these strategies, you can reduce your loan term and save money.

Things to consider before changing your tenure

• Impact on EMIs: Ensure you calculate the new EMIs to see if they fit your budget.
• Total interest cost: A longer tenure means paying more in interest, so weigh the pros and cons before extending your loan term.
• Processing fees: Some lenders charge fees for tenure changes. Confirm these charges to avoid unnecessary costs.
• Prepayment options: If you can make partial prepayments, you might not need a tenure change. Prepaying reduces the principal amount, lowering EMIs without adjusting tenure.

How home loan tenure impacts your EMI

Let us take an example to understand how tenure impacts EMIs:

Loan amount: Rs. 50,00,000

Interest rate: 8.5%

Tenure:

• 20 years: EMI = Rs. 43,391
• 15 years: EMI = Rs. 49,169
• 10 years: EMI = Rs. 63,862

While a shorter tenure increases EMI, it reduces the overall interest paid. Use an online home loan EMI calculator to find the perfect balance.

Switching to a new lender for better tenure options

If your current lender does not offer favourable tenure modification terms, consider refinancing your home loan with another lender. Many lenders provide balance transfer options, allowing you to switch to a lower interest rate or more flexible tenure terms.

Why choose Bajaj Housing Finance for your home loan needs?

Bajaj Housing Finance provides custom solutions tailored to your financial needs. With a quick and easy application process, attractive loan terms, and a dedicated customer support team, Bajaj Housing Finance is an ideal choice for anyone seeking home loan refinancing or better tenure options.

If you already have a home loan and are looking to transfer it to a new lender, you can consider the home loan balance transfer and top-up loan option offered by Bajaj Housing Finance. With competitive interest rates, flexible repayment terms, and a simple application process, managing your home loan becomes hassle-free.

To apply for a home loan balance transfer and top-up loan from Bajaj Housing Finance, follow these easy steps:

Click the 'APPLY' button on this page.

Provide your full name, mobile number, employment type, and preferred loan type.

Generate and submit your OTP for phone number verification.

Select your current home loan lender from the dropdown and enter your monthly salary and desired loan amount.

Continue by filling out additional details, including your date of birth, PAN number, email, current EMI amount, and other relevant information.

Click on the 'SUBMIT' button to complete your application.

Once submitted, your application will be processed, and our representative will contact you to guide you through the next steps.

Ready to make your home loan work for you? Visit Bajaj Finserv today to explore the best home loan options tailored to your needs.